Vivendi

In the industrialized sector, all companies see their evolution through the specialization of a certain activity. Allocating every resource to the exploitation of a main business activity engenders the creation of a core competency unique to the firm in question. This competency will allow the company to gain competitive advantage over rivals. After acknowledging the firm’s reason of existence, the subsequent step the firm must carry is to develop corporate strategies that outline how the business must be conducted. Finding ways to increase the number of business activities; which are in-line with the core of the business, helps the firm penetrate untapped markets and remain competitive. The company must always alter its ways of doing or even its business activities when exposed to changes in the corporate environment. But the question here is until what point? The firm must find the right balance between the number of new advances that can be brought to the company and the expected payoff of these advances. The company must assure that every business activity is centralized around one core corporate activity and forgo the possibility of earning high returns with an activity that is not related to the business. Under Guy Dejouany’s control, CGE generated tremendous cash flows from the management of the municipal water services in France. As revenues kept on rising, CGE became part of “le noyaux durs” in France and made itself a reputation across the world. But at one point in time, Guy Dejouany shifted his practices based on value-creation towards the diversification of its business practices. Earnings from the core utilities businesses allowed CGE to diversify. Many of CGE’s decisions were based on expanding into new businesses. Dejouany’s approach was to allow outside parties that he trusted to bring their knowledge of the market to CGE. The diversification strategy stemmed from the close relationships that Dejouany established...

You May Also Find These Documents Helpful

...9-799-019
REV: MAY 16, 2003
CYNTHIA A. MONTGOMERY
Vivendi (A): Revitalizing a French Conglomerate
After nearly two decades under the leadership of Guy Dejouany, the November 1995 board
meeting of Compagnie Générale des Eaux (CGE) marked not only the end of an era, but the transfer
of control to a new captain, Jean-Marie Messier. Besides the obvious difference in age between the
76-year-old Dejouany and the 38-year-old Messier, the contrast between the two in terms of
leadership style and strategic direction could not have been sharper.
In 1976 when Guy Dejouany took control, CGE was primarily a water utility company with some
activities in waste treatment. As the 1980s progressed, reacting to what he saw as “unique
opportunities,”1 Dejouany used the cash flow from the core utility businesses to expand into a wide
range of ventures. By November 1995, revenues were eleven times the 1976 levels and the company
had diversified into a wide variety of businesses including real estate, healthcare, and
telecommunications. CGE was one of the largest French companies; indeed, it was in the top 100
companies in the world. (See Exhibit 1.)
By the mid-1990s, however, CGE had serious financial problems. In 1995 the company
experienced a net loss of 3.6 billion French francs (Frf). The company’s real estate investments had
collapsed, and debt levels ballooned. The stagnant share price caused investors to question whether
the problems were a blip on...

...leadership
change occurred at the right time. Dejouany looked at the big picture and maneuvered
CGE into a vast and profitable conglomerate at its prime, while Messier painted the
picture and refined CGE into Vivendi, focusing on shareholder value.
With the merger of Havas, Vivendi could either further centralize and strengthen
the corporate office, or give Havas autonomy. The better choice is to strengthen the
corporate office which will reduce redundancies and free up cash. Vivendi has different
options in expanding its three focus areas of utilities, communications, and construction
and property. Since utilities provide stable cash flow, they should continue servicing
domestically and slowly expand internationally. Vivendi must trust their projections of
growing operating profits in communications and aggressively expand, while contracting
construction and property to free up cash for the communications expansion, as well as
lowering the company’s debt to equity ratio. These steps will guide Vivendi to success
like its predecessor CGE in the 1980s.
I & II. Problem statement/Key issues & Supporting argument
The case discusses the difference in leadership styles and behavioral patterns
between the two CEOs of Vivendi, previously known as Compagnie Generale des Eaux
(CGE). Guy Dejouany, who was the CEO of the company from...

...important and popular entertainments in 21st century. As a famous company of this field, Vivendi acquired the Activision in Dec 2007. After that transaction, the two big giants of gaming industry, Activision and Vivendi games— which includes Blizzard entertainment, announced that they would form "the world's most profitable games business" in a merger deal of $18.8 billion. The business range of the new company named “Activision Blizzard”, would cover every territory of the world on every gaming platforms, such as PS3, Xbox 360, Wii and PC games. BBC news said, “The companies behind Call of Duty and World of War craft are merging in a deal which could shake up the global video games industry.”
Activision, which was found on October 1st 1979 in French, is one of the world’s leading independent publishers for the interactive entertainment. It is famous for its top selling game series--Call of duty. Especially, Call of duty 4 has sold over 10 million units and received awards from various game sites and gaming authorities. Moreover, Activision is well known for other good selling games, such as Tony Hawk series, Guitar Hero, Spider Man, Transformers and X-men. According to the research from the leading global market research company-the NPD group, Activision is now one of the largest third party video game publishers in the world and was also the top publisher for 2007 in the United States.
Vivendi is an international French...

...AtekPC Project management Office
1. What are the challenges given to AtekPC and PC industry as a whole?
- A slow down in sales and profitability
The PC industry was experiencing tremendous cost pressure and was undergoing a period of consolidation. As profit margins fell, PC makers
were launching cost reduction strategies aimed at further improving the
efficiency of their supply chains, while lowering the cost of distribution.
- Substitute good for PC
Consumer want to reap the benefit of being able to access email from
anywhere 24/7 without the inconvenience of carrying a notebook computer
around with them. Mobile phones and PDAs now provide this functionality.
2. What were the benefits of informal approach to projects?
- Rapid response
Lead analysts had long tenures in their areas and developed a deep knowledge of the business activities, needs, and people. As a result of
their informal approach, they provided rapid response to user requests and
were able to balance emergent critical needs within their workgroups with
few conflicts.
3. Who prefers the PMO-heavy/PMO-light? What are the benefits of each model?
- Steven Gardner (Manufacturing Systems Manager)
. prefer PMO-heavy because the PMO-heavy would provide a project manager resource pool.
- Richard Steinberg (Director Application Development)
. prefer PMO-light because the PMO-heavy require more people.
- the benefits of PMO-heavy
....

...trust with individual managers. It was a special sort of governance and useful too.
Jean-Marie Messier : New CEO of the company also acted as a key change driver for the company. He was very clear about his vision, mission and principles. He changed the organizational culture and structure to a large extent and showed overall positive impact for this. He also tried to eliminate all non-profitable strategies and implement new profit making strategies. He made all the required changes for this. He restructures the whole system through consolidation process. Management philosophy for its construction company SGE also changed: SGE was no longer to pursue volume, but rather profitability. Messier is the person who changed the name of CGE to Vivendi and created a new and brand name and image for the company.
Most of its managers were educated in one of the two schools, Ecole Nationale d'Administration or Polytechnique. Both schools encouraged a "Colbertist" management style, which created a different kind of foundation in the thinking pattern of those managers and acted as a change driver in the business system of CGE.
Other than above given change drivers, following are some other facts which also acted as derivers of change for CGE:
 Diversification and expansion of cross-shareholding.
 Privatization during the time of 'cohabitation'.
 Crash in real estate market made CGE to divest in real estate company.
 1995 corruption scandal which was one of the...

...During the 1980's the French economy expanded assimilating rapidly the scarce existing venture capital from the week capital market. As a company with a healthy cash flow, Compagnie Générale des Eaux (CGE) took advantage of economic circumstances and pursued a strong expansion strategy entering different business realms like real estate, healthcare, or telecommunication. Although this strategy worked well with the current economical conditions, the absence of an adequate organizational structure and control was the main cause for the serious financial problems that followed on the late 1990's.
The person responsible with the vast expansion of CGE, Guy Dejouany promoted a strong asset diversification strategy. This was possible through a highly decentralized decision-making process which let the subsidiary heads to pursue expansion measures. However, Dejouany overlooked all the company's operations, having individuals reporting directly to him. His management style was based on trust, delegating a lot of power to the individual managers. I believe this system would have worked for a relatively small company/institution, but as soon as the conglomerate grew and everything turned out to be too complex, this type of communication became ineffective.
Still, Guy Dejouany's tactics had a tremendous impact on the company's growth. During his presidency, the company's revenues increased from 15 billion Frf. in 1976 to a staggering 166 billion Frf. in the early 1990's. However,...